Conversations with Chief Innovators Ep 6: OneMain Financial

Welcome to Conversations with Chief Innovators, where our former CEO Pat Sheridan discusses innovation in business with transformational leaders across industries. In the seventh episode, we bring you Larry Fitzpatrick, Executive Vice President and CTO of OneMain Financial.

Watch the full episode below:

Larry Fitzpatrick is the Executive Vice President and CTO of OneMain Financial, the leading nonprime lender in the United States.

A true industry veteran, Larry has played a vital role in transforming OneMain Financial from a branch-based single-product company into a multi-product omnichannel company. Starting as Head of Digital, Larry assumed the role of CTO within 18 months of joining the company. Today, the century-old OneMain Financial is a leading player in the financial services space.

I recently sat down with Larry to talk about transformation in business, especially in light of radical advancements in GenAI. Here are a few excerpts from our conversation.

1. How did the role of Head of Digital/Chief Digital Officer evolve at OneMain Financial?

The Head of Digital role was created to drive the adoption of an omnichannel experience, exploit voice, web presence, and mobile, and shift some workload and customer experience away from coming into the branch.

When the pandemic hit, it accelerated the digital agenda as employees and customers didn’t want to or could not come into the office. The transition from less than 1% of customers closing a loan remotely to almost 50% doing so within a year marked a massive shift. The transition to Chief Technology Officer allowed for more changes to the underlying infrastructure to enable becoming more digital.

2. Innovation at large corporations often turns into an island of misfit toys. What was your experience?

One of the first things we tackled was the operating model of technology, transitioning from a traditional in-house IT to a software product company model. We reorganized our tech teams along value streams that align with segments of the customer journey, and set up Objectives and Key Results (OKRs) around that.

This strategic alignment, reviewed and updated through regular executive meetings, brought clarity on priorities and allowed us to break a monolithic delivery mechanism into smaller teams that can move more nimbly.

3. What is your take on modernizing legacy technology?

We took the position that we didn’t need to modernize our entire legacy technology stack. A lot of our stack and code is very stable and supports a unique business model. Our approach has been to identify where we can move the needle on the business and then determine where refactoring and re-implementation are needed within our core systems.

The key driver is test and learn and cycle time reduction in the digital channels, decisioning, and becoming multi-product.

4. Since last year, AI has dominated conversations on digital transformation. What has your experience been?

About a year ago, we formed a working group of senior leaders to examine AI. We updated policies and practices, looked at our third-party pipeline, and started seeding and examining particular use cases. Clear wins are in data analysis, document processing, summarization, and feature extraction.

We’re also exploring code refactoring to accelerate separating user experience, business logic, and data layers in legacy systems. Down the road, we see potential in expediting employee training and customer support, with a human in the loop to ensure safety and reliability.

5. Are there any ethical concerns about the use of AI?

Ethical considerations are very high on the radar because generative AI is fundamentally different in that we can’t explain how it’s working and it’s non-reproducible in many cases. It exhibits behaviors we might label as bad in humans. Nobody in financial services is deploying generative AI directly to customers without human oversight. We need to understand and quantify the risk profile of new solutions using generative AI.

Over the decades, we’ve developed guardrails for controlling a human workforce, but we need to gain confidence in replacing some human elements with machines. It’s an industry problem.

6. Any advice for first-time Chief Digital Officers?

You’ve really got to understand the business itself, what moves the needle, the constraints, and work backward from that. Figure out how to get buy-in from partners and what impact it will make.

The hardest part is roadmapping – imagining a possible future, understanding the business problems, but then incrementing your way to success by finding valuable proof points along the journey. Many can imagine a nice future, but few can break it down into a journey that gets you there in small steps. Focus on working backward and roadmapping.

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